Wednesday, July 22, 2009

Scoring this round: McClatchy 1, critics/analysists 0

A Macintosh blogger I follow has a feature he calls "claim chowder" in which he delights in digging up and exposing old predictions and claims after they have been proven spectacularly wrong. It's a delightful dip in a pool of revenge and schadenfreude.

Michael Simonton, welcome to a hot, steaming bowl of claim chowder:

Fitch Ratings analyst Michael Simonton is among the camp that believes McClatchy will wind up in bankruptcy court at some point. "Default is imminent or inevitable," Simonton predicted after McClatchy's debt exchange flopped.

In fact, evidence at hand now suggests he was not just wrong, but stupid wrong. This from yesterday (AP):

The surprising profit raised hopes that McClatchy has shrunk down to a size that will enable it to remain in good graces with its lenders and avoid bankruptcy protection ... "'It's really remarkable,'' said newspaper analyst Edward Atorino of Benchmark Co. ''They have done a Herculean job in a difficult economy. Unless things get a lot worse real fast, they should be OK for the rest of 2009.''

Obviously, much remains uncertain and unpredictable in the middle of both economic meltdown and an epochal phase transition in the news business. Anything can happen. Your mileage may vary. Yada, yada.

I'm no longer at McClatchy, certainly not privy to any insider information. I'm sure the execs there, as always, will be cautious and deliberate about what they have to say.

But I don't have to be. In the end, you ought to place your bets on one side or the other or shut up.

Note to Simonton: You get paid for this kind of analysis, right? You're an expert? Put up or shut up.

7 comments:

Haha, analyst douchebags. He also wasn't even considering the land assets sold and closing hopefully EOY, and other assets that could be sold if needed, and creditors have been pretty much paid in full with no heavy deal-making at this point.As Howard always says, newspapers can make cash flow- so analysts suck on that.

Careful Howard, that claim chowder tastes a whole lot worse when it's handed back to you cold.

The revenue picture is "improving" in that revenues are declining less. They are still declining. The expenses that MNI cut in the form of properties sold, infrastructure not updated and, yes, people whose careers were ended have for the most part reached the point where they come associated with their own costs in the form of limiting the value of what we can deliver.

So if the status quo continues, with an "improved" revenue picture of, say, only a 25% drop in revenue next quarter, what will MNI do for an encore? What will be left to cut?

Anon 751: Exactly the kind of simpleminded "analysis" that distorts so much about this discussion. Surely you're smart enough to realize you can't track multiple variable on a single line, eg Bernard -> revenues -> conclusion. What would the revenue have been like without him? How do you explain the improving Yahoo sales numbers?

-30- makes very good points, of course. "Fluid" is kind of as good as I'm hoping for right now.

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